Observations on technology, politics, and life in the 21st century, in New York City and the world at large.

Friday, February 19, 2010

Unique Problems With Uniques

Uniques are what make the world go around, at least the Internet world. Advertisers care about their reach, the numbers of unique users they get in front of on a campaign. 1 million is the magic number and all of a sudden getting advertisers becomes much, much easier.

Uniques are so important that marketers like me spend money generating cheap traffic to inflate uniques even at a loss. It's a sizable percentage of traffic if you do it right, enough to inflate the numbers without killing your click through rates and bounce rate (the rate people leave the website after the first page view).

It's all about uniques. How are you compared to your competition? Check the uniques on compete.com. How's the board think you are doing? Just show progress on uniques. But as someone who looks at web metrics and models businesses, unique growth and future prospects of most business have much more to do with member retention (churn, repeat usage), viral coefficients and cost of customer acquisition and value. With positive key performance indicators (KPI) along these lines and you know you have a business that has long term value.

Sometimes that means you make prioritization decisions in development to things that drive uniques even at the cost of longer term value. The reality is that for $500, I can drive 50,000 visitors. $5,000 then 500,000. Not much money to get you halfway to that 1 million unique magic number.

But a new report and analysis say that the whole industry could be overestimating our unique count by a factor of 2 or 3. That's just crazy. If that were accurate it could send shockwaves throughout the industry. Or not.

If the number changes, does it change the performance of existing campaigns? We can still measure ROI. It won't change tomorrow. It just means we are twice as effective at marketing to half the number of people we thought. Or will the new numbers scare off holistic marketers who compare the reach of traditional campaigns? If this plays out, it could be a very interesting year.